Overcoming the Blockchain Oracle Problem in the Traceability of Non-Fungible Products

Abstract

Blockchain implications within the sustainability domain are rapidly arousing the interest of researchers and institutions. However, despite the avalanche of articles, papers, and recently published books, innovation in the blockchain domain is still heavily influenced by light literature, such as news, articles, opinion posts, and white papers. Lacking a homogeneous literature background, case studies often fall into storytelling, providing mere descriptions of the facts according to the writers' impressions and opinions. We therefore investigate blockchain adoption for sustainable purposes through a case study while remaining firmly grounded in three main theoretical literature streams: knowledge management, knowledge infrastructure, and trust. Since blockchain interaction with the real world is managed by oracles, addressing the oracle problem is essential in order to evaluate the effectiveness of blockchain for sustainability issues. However, to the best of the authors' knowledge, no other paper has efficiently addressed this subject or even mentioned it. Recognizing its scarce consideration in the literature, the oracle problem will be analyzed in both theoretical and practical terms, thereby providing a way to solve the issues related to non-fungible products in the supply chain. Choice over the selected case study was made in light of the divergence in motives for the adoption of blockchain (economic over social), which makes the results more inferable at a broader scale and offers an insight into how sustainable innovations can also be economically viable.

Blockchain Technology for Sustainable Supply Chain Management: A Systematic Literature Review and a Classification Framework

“…The same study notes the barriers as (a) high cost of blockchain technology implementation, (b) poor quality Internet at site, (c) low technology diffusion, and (d) aversion to risky investments [63]. The motivations behind adoption of blockchain technology are both economic and social [64].…”

Blockchain adoption in food supply chains: a review and implementation framework

“…In particular, during the initiation stage, a firm can realize a need, acquire knowledge about the technology, and propose a suitable solution fitting with the firm's current situation. An example is a case study conducted by Caldarelli, Rossignoli, and Zardini (2020), in which an Italian cheese producer opted for Blockchain due to the desire to reach final consumers and reduce the risk of counterfeit products. Subsequently, the company took the time to learn about the technology and analyzed their current situation to outline the most suitable Blockchain solution (being run by a consortium, using third-party software, etc.…”

Big data for corporate social responsibility: blockchain use in Gioia del Colle DOP

“…There are also numerous testimonies of use of services by third parties, such as oracles, whose use in the production system is addressed by Caldarelli in his paper, also the great starting point for the observations made in this article (Caldarelli et al 2020 ).…”